Russian Withdrawals Quantified As Cyprus Central Bank Set To Expand Emergency Credit By Up To €3 Billion

When we reported yesterday that over the past week, the Russian depositors in Cypriot banks had managed to find loopholes through which to pull out billions in supposedly halted deposits (courtesy of bank shutdowns and capital controls) some, accurately, balked: if that were the case the Cyprus Centeral Bank would need a proportionate increase in emergency funding from the ECB (in the form of ELA) to make up for the deposit outflows. Which is why moments ago Welt reported precisely what we had been expecting to read all morning: the Cyprus Central Bank is about to demand even more cash from the ECB to plug the holes left from the stealthy Russian outflows.

CYPRUS CENTRAL BANK PLANS EXPANDING EMERGENCY CREDIT: WELT

CYPRUS PLANS EXPANDING EMERGENCY CREDIT BY EU2.5B-EU3B: WELT

DIE WELT CITES UNIDENTIFIED PERSONS FAMILIAR WITH THE MATTER

Remember: this is just a feeler by the Cyprus Central Bank in direction Frankfurt - the last thing Cyprus wants is to expose just how big the full liquidity hole is resulting from the stealthy Russian deposit outflows. We expect when all is said and done, the full incremental bailout needs to rise in the double digits.

I have bouts of primal anger that sits deep in my stomach. It is a bitter pill to swallow........let alone digest. Sometimes I must force myself to be calm, to understand that there are some things I cannot control.

However I do not need to be a victim and that understanding begins deep within. I just need to remind myself of this.

I'm thinking this is the start of the Black Hole of Banking. It will eventually collapse in on itself in order to 'plug the hole' but the size and speed of the collapse will create the Event Horizon from which no deposits can escape...

I like how they continue to pretend that there will be anything left of any of these banks by the time this is done. Everyone is going to pull their shit out as fast as possible, insured or not. How does a bank pay back billions in "emergency liquidity" when they have no depositors left?

cyprus is F***ed. the moment those doors open the accounts will empty. Bank Runs dont end after you take 40% of the peoples money. The people will want to pullout the last 60% and hide it in a tin can in the backyard.

anyone who leaves any money in those banks after this are retarted and should starve to death

The internet is a wonderful thing. The transfer of money cannot be stopped for payment of things ordered over it. One genuine hand painted Russian Babushka doll cir 1870 was brought for an insane amount under auction. Now I have both the doll and the money. Go figure how completly stupid this thing is. Thank you Fleabay / paypal your fee was most laughable compaired to the real thiefs

Never mind the Russian depositors' withdrawals... How about the UK depositors' withdrawal from Cyrpus Banks? Recall from ZH article a couple/few days ago, showing the deposits and withdrawals in a plot.

So, since I don't easily distract with side-shows for the masses, can we shine the spot light on the "UK story" also? Tyler?

there's something to that...The "Bernan Key"...or how about 'The Burnin' Key' ....ahhhh, I look forward to laughing about all of this after all the money is gone and wwIII is over...good times...good times...

100% correct. But you need to have a large enough account, to get that kind of access/services. The common man needs to spread their wealth across various banks in various places/countries, and keep enough cash at home. Which is totally foreign to Americans, who are brainwashed to use plastic and ATMs. Like sheep to a slaughter...

The London branches of Laiki and Bank of Cyprus never closed. If fact they allowed unlimited withdrawals during the bank holiday.
From Reuters:
EU negotiators knew something was wrong when the Central Bank of Cyprus requested more banknotes from the European Central Bank than the withdrawals it was reporting to Frankfurt implied were needed, an EU source familiar with the process said. "The amount the Cypriots mentioned... on a daily basis was much less than it was in reality," the source said.

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

Reminds me of when Jeff Christian at the CFTC hearing on PM manipulation said

"People say, and you heard it today, there is not that much physical metal out there, and there isn’t. But in the “physical market” as the market uses that term, there is much more metal than that…there is a hundred times what there is"

The two things you note are unrelated. Tyler's article yesterday probably confused you. The London banks are subsidiaries, not branches. They operate under UK law, and are capitalized completely separately from the Cyprus banks. There is no crossover of deposits. They operate under UK law and their deposits---which have nothing to do with deposits in Cyprus---are guaranteed under UK law. Someone with an account in Cyprus has no account at the London sub, and would not be able to withdraw anything there (unless he had a completely different account). He would be as likely to be able to withdraw funds from the London subsidiary as he would withdrawing from HSBC. Totally separate entities.

Let's say you have a bank account at Citibank in NY. If you go to Hong Kong, where Citibank has a subsidiary, you cannot withdraw from your NY account in Hong Kong, because it is a separate entity. You don't have an account at the HK subsidiary just because you bank with Citi in NYC.

US Banks have always been a bad service comp b/c of the BSA (and other) regs. However, I do know some Asians who use Citibank precisely because they can go to a Citibank NA branch and have a free espresso and free long-distance telephone service back home when issues arise while they are in the US, even if the US teller idiots can't even see how much money they have in their Asian accounts. The better question is- among the various transfer loopholes left open by the freeze order could the Cypress Bank move assets to the UK affiliate in circumvention of the freeze (and if so, with or without SWIFT)?

(Reuters) - The British arm of one of Cyprus's main banks said customers could continue to withdraw their cash but warned that deposits above 100,000 euros may not be safe.

Laiki Bank UK, owned by Popular Bank of Cyprus CPBC.CY - also known as Laiki - operates as a branch of its parent and gave clearer guidance on its website on Monday telling customers they are protected up to 100,000 euros by the Cyprus Deposit Protection Scheme and not the UK's compensation scheme.

"This means that if our bank is unable to meet its financial obligations, your eligible deposits are protected up to a total of 100,000 euros per depositor," the notice said. Britain's Financial Services Authority did not return calls for comment on whether it had forced the clearer guidance.

Ruth Harvey, a member of Laiki Bank UK's management team, said the bank was open as normal and there were no limits on withdrawals and no change to conditions. "We are waiting to hear the details out of Cyprus," she said when asked how savers with more than 100,000 euros might be affected.

Cyprus clinched a deal on Monday that will see Laiki shut down and heavy losses inflicted on uninsured depositors, aimed at averting a collapse of the banking system. Deposits above 100,000 euros will be frozen at Laiki and its bigger rival Bank of Cyprus BOC.CY.

Bank of Cyprus UK operates as a subsidiary, so has its own capital and is covered by the UK's deposit guarantee of up to 85,000 pounds.

Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which said it had not put any restrictions on withdrawals in Russia. It said no taxes or measures to bail out the Bank of Cyprus will be applied to Uniastrum.

"Even if after the events in Cyprus our partner, the Bank of Cyprus, will be forced to sell its stake in the Russian bank, this will not affect the financial condition and strategy of Uniastrum Bank," its president Gagik Zakarian said in a statement.

Cyprus has close links with Russia, and Laiki also has significant operations in eastern Europe, including about 140 branches across Ukraine, Russia, Serbia and Romania.

Its 2011 annual report showed it had 1.7 billion euros of customer deposits outside Cyprus and Greece, or 8 percent of the bank's deposits at the time.

he only modified the term 'template' because it was taken to refer to eu policy when it in fact that policy did not exist. policy statements are a process of any organization and decided within that processes. as yet, that has not happened.

not only has he not change the message of what he said in the transcript, he repeats it freely.

Wait a minute....and they pushed the re-opening of the banks from today to Thursday? I'm sure it's just a coincidence. They probably just want a couple extra days to count the people's money and make sure it's all there for them, and by them I don't mean the people.

I wonder how much payola was tossed around to allow access during the bank holiday to the +100k accounts. If you have 500 million euro and you are looking at a 225+ million euro loss, throwing a 10 million euro "bonus" to a soon to be unemployed bank exec is simply smart business.

I knew it, I knew it and the ECB should have known it. As one commentor said that it would be impossible for the Russians and others to stealthly move much of their funds because it would have been tied up financial instruments that would be hard to liquidate. I said no they would move the instruments OUT of the Cyprus control and then sell/liquidate them later in a better bank. This is exactly a feeler, because they know that they will need 30 billion at least.

The 'have not's', both in Cyprus and around the world (and this includes many Cyprus bank depositors with fund deposit totals above the so called "insured limit") will finally begin to understand deep down in their gut just how 'have not' they are once it is fully understood how 'leaky' the supposedly closed Cyprus banks were for the 'haves'.

WTI has been suppressed below brent and the $100 mark so when it breaches the so called "psychological barrier" it's a problem imo. Plus WTI brent spread seems to be recoupling slowly which is why I think it's something to watch.

Yes it is ekm. I know I quoted the less used one. But let's go with Brent. It is $108. It has been there for a long time. This Cyprus situation may be a huge deal to Cyprus but that may not spread anywhere else.

I know you are of the opinion that crude has to fall. But the stock market no longer gives a crap if 99% of the people are too broke to participate in it. Maybe oil does not care if people can no longer can afford it either? Maybe this is the new normal.

Having poked a hole in the bank-deposit thingy, I mean, sooooo 20th century, we'll see how the ECB reacts to catching only the wealth of the average Joe Cypriot. Probably declare victory and say the crisis is over.

Based on the "feeler" amount it sounds like the russians were able to "leak out" 7.5 to 15 billion euros. Nice job! Single digit billion bailouts happen on a weekly basis in the eu so consider the matter under rug swept. All is well. Ramp on to Dow 15000.